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Saturday, November 17, 2012

The ever
changing nature of the stock market will often boggle analysts if the current price
information displays an unclear message. There has always been, and there will always
be a fascination to wrongfully challenge what the future holds, instead of
interpreting what’s at hand. It’s as if
what is already known is simply not enough.

Such aspects
should never be the primary tool of one’s own decision making. In fact, this is
very reminiscent of my encounter with one wise expert on Wall Street. He is a seasoned
grizzly who has weathered decades of all different market climates and his ever
influencing demeanor once expressed to me, “Don’t tell the market... let the market
tell us!”

Many have
already come forth with bottom expectations, but none hold any convincing basis
for this belief. With regard to the averages, the message across the board is
simply no message at all. The only, if any, ‘take away’ from this most recent emotionally
inspired wave of selling has served as an oversold condition. No reversal has
transpired to even consider a change of events.

BUT, the last
thirty minutes into Friday’s close did reveal a heavy interest of buying for
reasons we will soon find out next week. Any follow through of this will result
in a swing low, but I must caution those who feel this may in fact be the more
important bottom. Let me explain.

Even in the
perverse of markets, rarely do stocks ever go down and then turn back up to
form a ‘v-bottom.’ These particular bottoms are suspect and almost all fail. A true
bottom worthy condition must present a subsequent retest of the low or in the
very least, find support near the general area to confirm that prices can hold
despite all of the bearish news.

Bottom Line:

After a second
low is presented, odds increase tremendously for an oversold rally into year
end. Leading into the second low, divergences will erect on all fronts and most
of the selling pressure should be ‘wrung’ out. Below is several examples to
further underscore this very sequence.

NDX
100- Daily Chart

﻿

In
case Friday was not a low of some kind, a bottom will soon be realized in the
coming days.

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Sunday, November 4, 2012

Not long ago,
in the article entitled, “The Final Run in Gold,” I outlined a sequence of specific
events that called for an imminent correction in Gold. Contrary to this viewpoint,
the pervasive narrative among analysts at that time was forecasting the metal
price to reach as high as $2,000 an ounce. Of course, this expectation never
came into fruition, nor was it rational enough to give any credence either.

For those of
you who are owed back the explosive rally in September NOW get a second chance.
Prices are in their final days of this current decline, and will present buyers
with one extraordinary opportunity. My target between 1850 and 1900 I see can
be realized in the coming 4-6 weeks, likely leading into mid December. All it
will take is a one day stroke higher of 20 to 25 points that initiates the
reversal, and which generates an avalanche of buy orders thereafter.

As you all
know, psychology in the commodity markets is driven by the element of FEAR, but
this time it will be BULLISH PANIC. The truth of the matter is that Gold is in a
roaring new bull market. And these hyper-sold conditions trap investors because
they are emotionally forced to sell their positions at the very wrong time.
Bottom fishing to this degree where valuations are extremely suppressed is not
an occasion that comes very often.

The canvas
below you will see I’ve ‘inked’ with my long expectation of the price action in
the yellow metal. Don’t get left behind as the train is not far from leaving
the station.

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